Luxury stocks weighted by news at Burberry and LVMH

Wednesday trading was substantially shaped by the

decline of luxury goods stocks, which accused the not so positive news from Burberry’s CEO exit of the company and those of a growth slowdown at LVMH. In Germany, Hugo Boss closed down, mirroring the sector’s sentiment.

In Wall Street, shares of Joe’s Jeans Inc. fell more than 8 percent Wednesday, a day after the apparel maker reported losses for the third quarter on declining sales of one brand and expenses related to the acquisition of Hudson, closed at October 30 and that generated 1.3 million in expenses for Joe’s Jeans.

The denim brand owner reported a net loss of 287,000 dollars for the quarter ended Aug. 31, compared with net income of 2.7 million dollars in the same period a year earlier. In the same vein, sales fell 3 percent to 29.4 million dollars, heavily weighted by its struggling Else denim line made for.

Macy’s department stores net wholesale revenue also fell, by 7 percent, to 23.1 million dollars. For the period, retail sales rose 14 percent to 6.3 million dollars and same store sales slipped by 6 percent. “Our quarter marked a transition for us as we worked toward the completion of the acquisition of Hudson,” Chief Executive Marc Crossman said in a call with analysts.

On a separate note, analysts at Trefis assessed Gap’s last performance and results in a note to investors issued Wednesday. “Having performed well through most of fiscal 2013, Gap Inc‘s comparable store sales declined in September 2013 due to prevailing retail market weakness. The company’s net sales remained flat and comparable store sales decreased by 3 percent compared to a 6 percent increase in September 2012. This weak performance is attributable to a subdued US apparel market caused by cautious consumer spending and a change in spending patterns.”

Despite the challenging conditions, Trefis remains positive about the short-term for the retailer, stressing that “Although the month was challenging, Gap Inc’s management believes that it can still deliver on its full-year goals. We also remain optimistic on the company’s long term outlook since it has performed well in the past when most apparel retailers in the US were struggling. Growth in Gap Inc’s e-commerce business and aggressive international expansion support our bullish outlook.”

Trefis’ current target price on the stock at 50 dollars per share implies a premium of about 25 percent to the market price.

Finally, and as reported by Reuters, Swiss luxury group Richemont might be allegedly looking for potential buyers for its fashion brand Chloe and received a non-binding offer this month from private equity firm Change Capital for leather goods maker Lancel, sources close to the matter said. Sources quoted by Reuters said at this regard: "It is not a question of if but a question of when."